BYD Outpaces Tesla — Reports Over $28B in Q3 Revenue

Key Takeaways

• BYD surpassed Tesla in quarterly revenue for the first time, showcasing its rapid growth and market dominance.
• The company reported a significant increase in net profit in the third quarter.
• Analysts are optimistic about BYD’s future performance, with positive earnings and revenue forecasts for the upcoming quarter.

Strong Third-Quarter Results

Chinese electric vehicle giant BYD reported record-breaking sales , posting third-quarter revenue of 201.1 billion yuan—equal to $28.24 billion—marking a 24% increase from the same period last year.

Net profit attributable to shareholders totaled 11.6 billion yuan, representing a 12% increase from last year. Net profit for shareholders rose to 25.2 billion yuan since the beginning of the year. This reflects an 18% year-on-year growth.

After removing extraordinary gains and losses, adjusted net profit for shareholders reached 10.9 billion yuan for the quarter, a 13% increase, and 23.2 billion yuan year-to-date, up by 20%.

The company’s net cash flow from operating activities reached 56.3 billion yuan year-to-date, a decline of 43% from last year. Basic and diluted earnings per share for the quarter were at 4.00 yuan, increasing by 12%. The year-to-date figure stood at 8.68 yuan, up by 180%. BYD’s weighted average return  on net assets was 7.5% for the period, down by 0.9% compared to last year.

Surpassing Tesla

BYD has solidified its lead in the Chinese electric vehicles market, capturing over one-third of the country’s EV and plug-in hybrid sales this year. The company achieved record monthly sales  in September and set a new quarterly high for the third quarter.

Both BYD and rivals like Tesla have benefited from expanded “old-for-new” incentives designed to boost cleaner vehicle adoption. These government subsidies also supported China’s car sales , which rebounded last month after a five-month decline.

BYD’s quarterly revenue surged by 24% to $28.2 billion in local currency, slightly below the $28.3 billion forecast but well above Tesla’s $25.2 billion for the same period. Though BYD has been closing the revenue gap with Tesla for some time, this marks a significant milestone.

Regarding vehicle sales, BYD surpassed Tesla for the first time  in the second quarter of 2022. It now sells more than twice that of Elon Musk’s company: 1.135 million units compared to Tesla’s 462,890. However, while Tesla produces only fully battery electric vehicles, BYD manufactures both BEVs and plug-in hybrids. Demand for BYD’s PHEVs has surged this year, driven by the company’s advanced hybrid technology.

What’s Next for BYD?

As the market achieved the third-quarter earnings, it now wonders what’s ahead for the Chinese carmaker. According to analysts , the fourth-quarter earnings estimate is at 4.34 yuan per share, within a range of 3.74 to 4.94 yuan. This compares to the previous quarter’s EPS of 3.39 yuan.

Over the past year, BYD exceeded its EPS estimates 75% of the time. The EV manufacturer has outperformed its industry in annual earnings performance.

Regarding sales, the fourth quarter forecast is at 219.10 billion yuan, ranging from 198.19 billion to 231.96 billion yuan. In this case, BYD has not exceeded its sales estimates in the past year, as the industry achieved this 70% of the time.

Trading under the 1211 ticker, 11 Wall Street analysts have issued 12-month price targets for BYD, setting an average target of 325.17 yuan. Estimates range from a high of 380.00 yuan to a low of 230.00 yuan. This average target suggests a potential 9.5% increase from BYD’s current share price of 297.00 yuan.